Source: Glassnode; Compiled by: Wuzhu, Golden Finance
This week, we introduced another exploration of CBD use cases - analyzing Metaverse tokens. Despite falling prices and fading hype, on-chain data shows that major investors remain active, steadily accumulating and reducing their cost basis.
Does this indicate a long-term bet on a Metaverse recovery? Let's first review how to analyze and interpret CBD data, and then apply that knowledge to the latest trends in the Metaverse.
Cost Basis Distribution (CBD) tracks where token supply is concentrated based on the average cost basis of holders. By analyzing changes in the supply distribution, we can identify investor behavior - whether they are accumulating, selling, or reallocating their holdings.
How to Read the CBD Heat Map:
Color Intensity (Supply Distribution)
Warm colors (red/yellow) indicate a high concentration of supply within a given price range, while cool colors (blue/green) indicate lower supply.
Vertical Axis (Cost Basis)
Each horizontal slice represents the price range that a portion of the supply last moved, showing how holders have adjusted their cost basis over time.
Tracking these changes helps us find potential market turning points where accumulation or distribution trends could signal future price action.
In this analysis, we focus on Metaverse tokens — The Sandbox (SAND), Decentraland (MANA), and Axie Infinity (AXS) — that were among the most prominent assets during the 2021 Metaverse craze. While the hype surrounding the virtual world has faded, our focus shifts away from user activity and instead uses Cost Basis Distribution (CBD) data to examine investor behavior.
Rather than assessing adoption metrics or in-game activity, we analyze how token holders adjust their positions over time. Do they sell off, hold steady, or accumulate at lower prices? By tracking supply changes at different price levels, we can gain insight into how investor conviction evolves in the post-hype phase and whether accumulation trends suggest long-term confidence in these projects.
Despite price volatility, on-chain data shows continued accumulation. Conviction holders are steadily increasing their positions, reinforcing their confidence in the project's long-term potential.
Supply concentration has increased significantly, reaching around $0.60, reflecting increased buying activity after the price drop. This suggests that investors see the price drop as a buying opportunity rather than a sign of further decline.
Despite the ongoing downtrend, on-chain data shows a large number of positions gradually increasing. This pattern suggests that some investors are still confident in the future of Axie Infinity.
The speculative hype surrounding the Metaverse may have faded, but on-chain activity suggests otherwise. The continued accumulation of major Metaverse tokens suggests that many investors view these projects as undervalued opportunities rather than failures.
Does this set the stage for a future recovery? While price action remains uncertain, data shows that confidence among major market participants remains strong — and they are positioning accordingly.
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